Analysis of the effectiveness of state procurement and commodity interventions in the grain market in Russia

Abstract

Subject. Effectiveness of state interventions aimed at stabilising domestic prices. Objectives. To study the effectiveness of procurement and commodity interventions in the grain market regarding their ability to stabilise grain prices within Russia. Methodology. Correlation analysis, economic and mathematical modelling based on regression models, calculation of statistical indicators of variation. Conclusions. Procurement and commodity interventions conducted in Russia are not effective enough to ensure price stability in the grain market, which was confirmed by the low values of average linear deviations of actual market prices from the values calculated by regression equations for the periods of interventions. Building economic and mathematical models of the relationship between grain prices and significant factors showed that domestic prices considerably depended on global grain prices and were also highly influenced by the dynamics of production factors in grain-consuming industries. Thus, it is necessary to supplement the mechanism of interventions used in Russia, specifically through measures that help to reduce the dependence on external factors with a high influence. The results of the conducted study may be further used to determine a wider range of factors that affect domestic grain prices and, based on this, to improve the conducted state interventions.

Keywords

• grain market
• procurement interventions
• commodity interventions
• state regulation
• price
• wheat
• barley
• rye